Back to Basics: A Must For Successful Succession
If YOU don’t plan the transition of your business, just who do you think will? That is the basic question.
Burying your head in the sand, looking away, and keeping your head down are all euphemisms for denying this obvious and necessary question. Wishing it weren’t so is not a strategy. Your business is going to change. It will move – from your hands to someone else’s. Period. “If” isn’t in the equation at all. The question is: how, when and who.
What are your choices?
- You can do it in advance, purposefully with a plan, giving yourself options, control, and time to make the best of it.
- You can leave it to someone else to do without your permission, your unique insights, thoughtful strategies, concern for your employees and customers, and hopes for the future.
If you die with your boots on, without a plan in place, here are some possible scenarios:
- Your employees carry on, doing their best to keep the business going, keep their jobs, paying your family what they can out of profits – if there are any. However, if they have the ability to do that when you’re gone, you should get them to do it now, so you can oversee the process and coach them for the best outcomes.
- Your children or spouse could take over. Maybe that’s the informal plan anyway. If it is, formalize it now when you are still confidently in control and able to mentor them toward success. You might also find that they aren’t interested and you need to come up with Plan B before it’s too late.
- Your creditors could call your loans forcing your family or estate to sell even if it isn’t the best time in the market to do so.
- Your former spouse or a shareholder could demand that the business be sold for pennies on the dollar.
There are other scenarios that don’t get much better. As the owner of the business you have an obligation – a responsibility to do what needs to be done so that when the time comes – and it will come – your business transitions according to your plans and wishes, not someone else’s. Because that’s the basic question: If you don’t initiate it, who will? It doesn’t mean you have to do it on your own; you can get help. You do have to make the first step.
January 3, 2017
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